Recently, RealTown released the MLS of the Future Vision Article authored by RealTown's Saul Klein. The article release has created an incredible buzz in the Real Estate industry. If you have not read the entire 28-page paper, you can download it by visiting http://MLSofFuture.com. In the meantime, we have been releasing a portion of the paper to allow you to read the specific sections and make online comments that will fuel additional views and opinions on the subject as we move forward. This is the final excerpt.
What will be required to build on the current solid foundation of today’s MLS? This paper attempts to answer this question and create a basis for an industry discussion. Open and frank discussion is essential to creating the tools and organizations that will position REALTORS® to provide services to meet the expectations of future buyers and sellers. This Paper is a vision and not a roadmap. MLS in the broad, generic sense, needs to be redefined in the age of information proliferation and online participatory environments. MLS is more than an offer of compensation and cooperation, but how much more? That decision is up to you.
When do we start? Some MLSs already have begun, so the answer is yesterday. The successful creation of MLS 5.0 will require vision, leadership, and courage. The technology is not the challenge -- people, organizations, their habits and models of the world are the challenge. The words of Peter Ducker, father of modern management, have never been more applicable: “Every organization has to be ready to abandon everything it does, to reinvent itself.”
There will be controversy and debate between knowledgeable and well-intentioned people. Association and MLS leaders, staff and volunteers, brokers and agents must collaborate to create the MLS of the future; otherwise their MLS of the present will become a relic of a bygone era. Our industry is going through nothing less than a "Paradigm Shift" driven by technology and generational forces. As stated by Joel Barker, author of Future Edge, "when a paradigm shifts, everything goes back to zero". MLSs and Associations, large and small, rich and poor, must assist brokers in creating compelling arguments for membership and compelling arguments for consumers to use the services of real estate professionals. It is said of Gen X-ers that being of the “latch-key kid” generation; they have always done everything for themselves, and feel that they can continue to do things by themselves. Give them some Starbucks and access to Google and they can fly the space shuttle. Their attitude might be “Why would I need help finding and buying a house?”
MLS and the industry today can become the creators of the future instead of the victims of circumstance. Creating a future by design instead of a future by default requires the ability to deal with massive and increasing amounts of information in a rapidly-changing and participatory environment. The answer is not just an MLS, but the MLS of the future, MLS 5.0, which incorporates the consumer, and makes the REALTOR® a participant in the conversation, not just a cog in the transaction.
What is the alternative?
If we don’t do it, the list of alternatives is growing: Craigslist, Google, and others, some not yet created, all in the spirit and built with the concepts, philosophies, and building blocks of Web 2.0 and putting property information in context for the consumer. For real estate professionals, now is the time to create your compelling argument for what you do and what you charge. The same holds true for MLS.
Famous Last Words
“We can never be replaced. This is a people business and there is always going to be a need for a real estate professional in the transaction.”
Today, there are artificial intelligence software packages that know more about the transaction process than many agents. Inventories are easily accessible online. Homes are easily and inexpensively advertised online by anyone with very little technology expertise required. Complacency about one’s value in the home buying and selling process could prove disastrous.
“During the 1970s and early 1980s, technological upheavals (appearance of the quartz technology) and the difficult economic situation resulted in a reduction in the size of the industry: the number of employees fell from some 90,000 in 1970 to a little over 30,000 in 1984.” Federation of the Swiss Watch Industry FH
The paradigm shift that evisceratedthe Swiss Watch Making industry was the quartz crystal, invented by the Swiss, not protected, and used by competitors to make their highly skilled craft obsolete.
Transaction of the Future
Party A wants to sell and advertises her home on Craigslist
Party B wants to buy Party A’s home, Party A does not want Party B’s home, so the two Parties now work through their channels to sell Party B’s home.
Party C is found and wants to purchase Party B’s home, but needs to sell his home first. Parties A, B and C all now work their channels to find a buyer for Party C’s home.
Party D is found, wants to purchase Party C’s home, and Party A (remember Party A?) wants to purchase Party D’s home.
Consumers Bundle the Entire Deal
Contracts are created (maybe with the help of an attorney, or artificial intelligence software.
Parties offer through a bidding process on e-Bay the entire package to one broker. Lowest bidder with most experience wins the bid.
Consumers save tens of thousands of dollars.
There is a lot of information contained in this paper, and yet, it is but an annotated outline of what must be done to take advantage of and build upon the strengths of MLS and of the real estate brokerage business.
MLS is really an amazing creation if you think about it…A collection of competitors, in a highly competitive, commission-only business, sharing inventory and sharing compensation. The result is a more effective market for brokers and consumers. Over the years, MLS has changed and it continues to have the most accurate property data available anywhere, and it is constantly updated and kept accurate by an army of real estate practitioners. Today, agents and homeowners themselves are advertising their properties on Craigslist, Google, Yahoo, and other sites. All of these sites would love the content MLSs have because it is of much higher quality and accuracy, and would bring more traffic to their sites.
What if the self-policing aspects (Web 2.0) really began working on Craigslist (or any other online advertising site)? What if every seller just knew that the place to advertise their home to consumers and to agents was on Craigslist? What if they know how to post it on Craigslist themselves (and you, the real estate professional did not know how)? If Craigslist became the source of all available properties for sale, nationwide, how might that impact the MLS? If as a REALTOR® you could find the complete inventory of property for sale, for free, why would you pay $40 per month (or a lot more is you participate in multiple MLSs) to belong to MLS?
If you think Craigslist would take the time to become known as the place to list property, you may be correct, but how many people knew of Google 5 years ago and how many know of it today? How many people knew of Craigslist 5 years ago and how many know of it today? In a short span of time, unknown web sites have become household words. The world of MLS as we know it is approaching a cliff, and many riding the MLS train, do not see the cliff as it gets closer with each passing day.
And think about this, the inventory of books on Amazon, or the inventory of things for sale on e-BAY, or the things for sale on Craigslist are available to the world through one database. Does that teach us anything about where MLS might head in the future?
So here is the point, we don’t expect things to remain as they have always been, so how is MLS any different? MLS needs to redefine itself from a purely Business to Business (B2B) network tool to a marketing facilitator for its participants and subscribers. It needs to take advantage of its assets and shift its paradigm from information about what is for sale to information on all property whether for sale or not. From this perspective, brokers and agents can continue to effectively differentiate themselves from the competition, manage information more efficiently, provide more service to their customers, and evolve to be the “trusted and authoritative source” they would like the world to think they are.
Is the creation of MLS 5.0 a major project? It is. It will require conversation and analysis by all who are considered as stakeholders…but how do you eat an elephant? You have heard it for years: “one bite (byte) at a time.”
Your Plan of Action:
- Circulate this document
- Create a Committee for the Future of MLS
- Participate in online discussions (start at ) http://RealTown.com
- Start local online discussions with MLS and association leadership
- Analyze your current MLS structure
- Adopt the Vision and Mission of MLS 5.0
- Analyze the Strengths, Weaknesses, Threats, and Opportunities of your MLS
- Create a Strategic Plan
- Create a 12-18 month Operating Plan for implementation of your MLS Strategies
- Include timelines and a Critical Path Analysis
- Constantly track communicate progress to Stakeholders
- Keep an open mind